00-3598 Trustees of the AFTRA Health Fund v. Biondi

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“[L]ike the Second Circuit, we conclude that it would be improper ‘to hold pre-empted a state law in an area of traditional state regulation based on so tenuous a relation without doing grave violence to our presumption that Congress intended nothing of the sort.’ Dillingham, 519 U.S. at 334. It would, in our opinion, elevate ‘uncritical literalism’ to a new level to characterize the Trustees’ common law fraud claim as an ‘alternative enforcement mechanism’ of ERISA when ERISA’s civil enforcement provisions, i.e., § 1132(a)(1)-(9), neither address nor provide a remedy for situations where a employee benefit trust fund has been defrauded by a non-fiduciary. See 29 U.S.C. §§ 1109, 1132(a)(1)(2), 1132(d)(2). See also Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996) (holding that § 1132(a) only permits suits for legal relief against ERISA plans, administrators, or fiduciaries). Because ERISA does not provide any mechanism for plan administrators or fiduciaries to recoup monies defrauded from employee benefit trust funds by plan participants, garden-variety state-law tort claims must, as a general matter, remain undisturbed by ERISA; otherwise, there would be no way for a trust fund to recover damages caused by a plan participant’s fraudulent conduct. See Mackey, 486 U.S. at 834 (where the Supreme Court made a similar conclusion regarding a plan participant’s right to use ‘state-law methods for collecting money judgments.’).”

Affirmed.

Appeal from the United States District Court for the Northern District of Illinois, Kennelly, J., Manion, J.